Exploring the rural eco-economy beyond neo-liberalism

Terry Marsden

L • Rural and Urban Communities

E

N • Agri food systems and the bio economy

S

E

S

(Global, Regional, Local)

Approach

The Transition: • Sustainability science

• Sustainable place making

• The framing and coproduction of science

• Governance models and Planning

The New sustainable Agri-food and Rural Paradigm

• A new ,multi-sector, place-based approach to rural development with closer links between rural and urban economy.

• Rural areas as part of more dynamic regions. • Shift from subsidy-driven to more variable

development through investments. • Exploiting and valorising hitherto unused

resources (OECD,2006).

Principles

• Protect • Provide • Predict • Promote • Stranded assets • Latent assets • Community businesses • Diversify and distribute

The counter-tendencies

• Continued cost-price squeeze in agriculture and financialisation of land based primary sectors

• Crises in the intensive agri-food regime: disease, food risks, carbon emissions, bio-diversity loss, health concerns.

• Further centralisation of service infrastructures with public sector austerity measures (e.g Devon, Shetland since 2010)

• Further demographic ‘draining’ from rural heartlands.

Centralisation as neo-liberal regulation

• Spatial concentration of function and services: ‘smart city regions’.

• Concentration of buying power in food and energy systems; feed- in tariffs, retailer-led contracts.

• Centralisation and corporatisation of science and R&D.

• ‘Tradable’ and replaceable eco-system services.

Towards the distributed economy

• Rural areas are the source and origin of distributed and distributive systems. Rural eco-system services are dispersed not centralised.

• Example: BBNPA provides 90% of water services to Cardiff, and 78% to Swansea.

• Example: Three National parks in Wales provide £557 million GVA (1.2% Wales Economy) 12 mill visitors and 13,000 jobs across Wales.

• Example: 40% of employment linked to environment-dispersed and often small scale.

The Bioeconomy and Resource Governance

Bioeconomy and land / water

resource

Sustainability • economic • social • ecological • intensification

Sovereignty • producers • consumers

Governance

Security

• food • energy • fibre • feed stocks

• neoliberal • post neoliberal

Phases in food governance and financial regulation

Regulation in the food supply chain and the role of different global organisations

Food Security Low (Vulnerability)

Food Security High (Resilience)

Sustainability High (Resilience)

Sustainability Low (Vulnerability)

1954 - 1984 1984 - 2007

2007 - present 1930s - 1954

High farming National productivism 94% self sufficiency

‘Food from our own resources’ Food prices decline as a

percentage of household income

Post-productivism Food scares associated with intensification Food surpluses ‘Supermarketisation’ Growing imports 60% self sufficiency

‘Dig for Victory’ Rationing

Food and energy shortages

‘Perfect storm’ Neo-productivism Sustainable intensification Alternate food networks Rising household energy and food costs Financial speculation

Positioning food security and sustainability in the UK

Bonnano. A (2014: 27)

The limits of neo-liberalism are theoretically clear and empirically evident… existing contradictions make it problematic to argue about the existence of an organised system.. It appears more like a project in crisis, rather than a regime. Yet, and despite claims of economic unsustainability and lack of substantive democracy, neo-liberalism remains the dominant ideology, and in many instances,, the preferred political choice of the second decade of the twenty-first century. Hall, S and Massey, D (2010) and emerging ‘post-neo-liberal’ state: History moves from one conjucture to another rather than being and evolutionary flow. And what drives it forward is usually a crisis… Crises are moments of potential change, but the nature of their resolution is not given. Neo-liberalism an explicit regulatory system : which has created: 1980s-2007 a particular hybrid public-private regulatory system (Marsden et al 2010) built upon financialisation and growth in food trade; the externalisation of risks to the South, and the proliferation of food ‘choices’ in the North. A spatial and ecological fix.

System Vulnerabilities Post 2007: from Transmango EU project

• Ecological: soil fertility, bio-diversity, production losses and declines in regional self sufficiency; water imports.

• Social: declines in health and well being; skill shortages on the farm and in the kitchen, rises in social inequality and low incomes; reductions in food sovereignty.

• Corporate and financial: oligopoly and power concentration; concentrated rather that distributed food infrastructures, unsustainable and unhealthy ‘food choices and editing’; dependency upon imports and non-renewable; extended corporate dominance of land markets which constrain small holdings, horticulture and more public access to growing; weaknesses in public regulation regarding food safety.

• Financialisation: food treated as increasingly a financial tradable asset, to be traded and ‘hedged’ over time and space. Growth in financial packages by banks, agricultural trading firms, and investment funds. Creating more volatility and scarcity value which dives up food prices for households, and land and bio-sphere markets; and the end of the ‘Engels Law’.

Corporate capture of the bio-economy

• European Crop and Protection Association

• ‘ A vision for the future of Europe-five steps to promote innovation, competitiveness and sustainable productivity ‘

• Build a science-based policy framework that balances risks and benefits • Implement smarter and better regulation • Ensure value-added consistency between EU policy and international agreements (e.g EU-US

TTIP; EU-Canada (CETA) and trade in services deal (TiSA). • Foster innovaton • Mainstream agricultural productivity and competitiveness.

• I.e more of the same and business as usual in the age of the bio-economy.

Sustainable food paradigm • 1. New food security and sustainability crisis with

combined landscape pressures associated with climate change, resource depletion and health and welfare

• 2. Need critical understanding of how science, technology, industry, markets, culture and policy regimes are responding to these more fundamental problems

• 3. Developing an engaging sustainability science in developing a new food, energy, nature nexus paradigm

A new governance and regulatory terrain?

• Scientification of nature and the rise of the bio-economy.

• Towards ‘post normal’ science?

A wider sustainability science paradigm

• ‘In the case of science related complex policy issues-such as those related to sustainability challenges-where risks cannot be quantified, when damage is possibly irreversible, where values are in dispute, the stakes are high and decisions urgent, the application of routine techniques of normal applied science are not sufficient. In practice most science-related complex policy problems have more than one plausible answer, and many have no-well defined scientific answer at all. The aim is thus not about arriving or deriving a single truth, but rather the exploring and enactment of new tasks and practices for science concerning the wider application of knowledge production and decision-making processes.’

• Contested framings • Co-production • Integrating sustainable place-making with post-normal science.

Defining the bioeconomy • ‘That part of the economy which captures the latent value of biological

processes and renewable bio-resources to produce improved health and sustainable growth and development.. An economy that uses renewable bio-resources and eco-industrial clusters to produce sustainable bio-products, jobs and income’ (OECD2011)

• By 2030 bio-technologies contributing 35% of outputs of chemicals (like bio-plastics); upto 80% pharmaceuticals and 50% agricultural outputs.

• ‘Spillover’ effects on energy, health and farming. EU turnover 2 trillion Euros;em]ploying 22 million and 9% of EU employment; exploiting the intersections between agriculture,forestry, fisheries, food, pulp, chemical and health and energy.

• Broader definitions of land and water-based eco-system services, including amenity; and rising significance of land rent from local provenance of products and services (Le Heron, Slee; 2012).

Bioeconomy is the next wave of economy By the year 2030, the world’s need for food will increase by 50 percent, need for energy by 45 percent and need of water by 30 percent. In bioeconomy, renewable resources will be used widely for producing food, energy, products and services. Efficient recycling of materials and securing the functionality of nature’s ecosystem services are characteristic for bioeconomy. Bioeconomy decreases our dependence on the fossil natural resources.

*The most important renewable natural resources in Finland are the biomasses of forests, soils, fields, lakes and sea, as well as supplies of fresh water. ** Ecosystem services are ones provided by the nature, such as absorbing carbon dioxide and recreational use.

Competing or complementary bioeconomy arena?

• Agriculture and forestry: commodities and multifunctionalities.

• Bio-materials: plastics,chemicals,energy,bio-mass.

• Bio-services and eco-system services: amenity, health,open space,heritage water, bio-diversity.

• Eco-Economy: local,organic fair,ethical, producer-based rural development.

Land questions

• Different combinations of the bio-eco economy • More diversity of land use and occupancy • More diversified markets of rural land based

goods and services. • Need for closer management of land uses and

occupancy • Closer urban-rural linkages. • Reintegrating production and consumption

interests.

Key features of SPM • Foundational economy: deep locality studies (Williams, CREW, 2014) • Endogenous-exogenous equations and networks • Innovations scaling out, in and under the nexus • Engagement with multi-level and reflexive governance and scales: village

neighbourhood, catchment, city region, bio-region, province… • Enrolment of community into the active reappraisal of: assets,

infrastructures, entrepreneurial networks, landscapes • Evolutionary collaborative/collective informal planning and project

development around place-based assets • Re-working strategies with existing regulatory and institutional structures

and creating new ‘spaces for action’ • Re-organisation of bio-sphere property rights • Participation in translocalism agenda.

SPM processes • Networked value creation rather than GVA/GDP squeeze • A re-capturing of multiple flows of knowledge, goods and services • Reflexive spatial governance • A re-localisation of social assets, capitals and market practices • A commitment to social as well as technical design, social innovation as well as new product

innovation. • A re-cognition of space as place • Filling in the social and infrastructural ‘missing middle’ between individualised behaviours

and aggregated abstractions. • Nexus (food, energy, water, landscape) thinking turning into practices. • Community based action research and capacity building

Shaping the eco-economy through financial re-engineering

• Creating regional accounts for sustainable development projects and initiatives (e.g Het Groene Woud, Netherlands).

• Shorter supply chains and networks. • Local enterprise trading systems • Time banking. • Crowd funding. • Community-based energy feed-in tariffs (e.g

Germany)

A Bioeconomy Value Network

Waste water

Fish business

Farming (greenhouse)

Biogas production

Fish farming

CHP

Household consumers

Wind power

Electricity grid

Sludge

Fish waste

Fish oil

CO2, heat, electricity Fish, vegetables

electricity

Biogas

Fertiliser

WATER

A biogas plant utilizes wastes of the local greenhouse and fish farming as well as other wastes to produce heat and electricity as well as fertilizers to local farmers and greenhouses

In 2050, real time trading systems enable a glocal world economy

Conclusions

• Differing bio-economy/ eco-economy framings in regions and nation states.

• Forces of integration and fragmentation. • Nexus and integrating value networks

providing new , more distributed business models (e.g SITRA, Finland, Lund, Sweden).

• New linkages between biodiversity, consumer choices/access and health priorities

Conclusions 2

• The Distributed economy • The deepened and broadened rural economy • Translocal and as well as re-localised connections.

e.g. Rural Alliances 76 community-business alliances/regional networks.

• Reflexive forms of multi-level governance: e.g procurement, fiscal and financial decentralisation, community co-production.

• Nexus business development.

Vulnerabilties in financialisation:The emergence of stranded assets in agri-food

• Stranded assets: ‘ unanticipated or premature write downs, devaluations or conversions to liablities’ (Caldecott et al, 2014).

• Caused by: one or a combination of : • Environmental challenges (climate change, water constraints) • Changing resource landscapes (e.g shale gas, phosphate) • New government regulations (carbon pricing, air pollution regulation, planning and protected

areas) • Falling clean technology costs (solar PV, onshore/offshore wind/tidal) • Evolving social norms and ethics and consumer behaviour • Litigation and changing statutory interpretations (e.g changes in application of exisiting laws

and legislation. • Open source and cooperative knowledge sharing

Some warnings from the financial regulatory sector

• ‘As the world increasingly limits carbon emissions and moves to alternative energy sources, investment in fossil fuels will take a huge hit’ (Paul Fisher Deputy Head, Bank of England).

• ‘The vast majority of fossil fuels are unburnable’ (Mark Carney). (80% coal, 50% gas, 35% oil, with companies spending £436 billion in 2013 on searches).

• ‘When the credit bubble burst in 2018, the damage was devastating. We are making the same mistake today with climate change. We are starring down a climate bubble that poses enormous risks to both our environment and economy’. (Hank Poulson, former US Treasury Secretary).

• ‘Sooner rather than later, financial regulation must address the systemic risk associated with carbon-intensive activities in their economies’ (Jim Yong Kim, World Bank President).

• Norwegian sale of coal related investments from its Sovereign wealth fund affecting 122 companies ($8billion).

Stranded assets in Agri food- a new landscape

• Caldecott et al (2013) • Environment-related risk factors are material and can strand assets throughout the

agricultural supply chain. The amount of value potentially at risk if globally significant. • The potential challenge of stranded assets in agriculture is currently being exacerbated by an

ongoing agricultural boom, which is feeding off high commodity prices and poor investment returns elsewhere in the economy, to push farmland values to record highs in many markets.

• Understanding environment-related risks that can induce asset stranding can help investors, businesses and policy makers to develop effective risk-management strategies, which can improve resilience and minimise value risk.

• The regulation and diffusion of bio-tech/GM can drive further asset stranding by: • Creating new or more vigorous pests and pathogens • Exacerbating the effects of existing pests through hybridisation and related transgenic

organisms • Harm to non-target species, such as soil organisms, non-pest insects, birds and other fauna • Disruption of biotic communities, including agro-eco-systems • Irreparable loss or changes in species diversity or genetic diversity with species.

Towards the (post-neo-liberal) eco-economy.

Enact distributed spatial development: quadruple helix: reflexive design with science, policy, community, business.

Create and join up new translocal and regional food and energy supply networks.

Create innovative platforms for ‘post normal’ sustainability science and sustainable place-making.

Progress Eco-economic and circular economy models (across ‘regenerative’ cities and regions) which embrace a more distributed bio-economy, giving priority to social and ecological objectives and adaptive structures.

Build new infrastructures, including new financial ecologies , food/energy/tourism hubs using digital media.

Embed and translate these into more reflexive multi-level governance frameworks.